Case Studies: Client accounting services in 2017

Outsourced accounting services aren’t always a stop-gap measure for companies that can’t afford an in-house chief financial officer or accountant. Firms that provide client accounting services to businesses often are able to provide perspective and breadth of experience that companies find valuable.

The software a firm chooses to use plays an integral part in passing on efficiencies to clients. The three firms below serve vastly different verticals, and have selected their CAS software according to the specific needs of their clients. Here are their experiences.

AN AFFORDABLE CFO

Product: QuickBooks Online

Firm: MissionFirst Accounting

Staff users: 4

Start date: 2015

On record: Founder and president Linda Swick, CPA

Objective: Before Linda Swick founded MissionFirst Accounting, she was CFO of International Teams, a global Christian nonprofit focused on providing physical and spiritual aid to communities in need. There, it became clear to Swick that “nonprofits need a lot of help due to the environment they work in being so complex.” Swick started MissionFirst Accounting to provide the kind of financial and accounting expertise the nonprofit sector needs, but is often too cash-strapped to pay for in the form of an in-house CFO.

Swick chose QuickBooks Online to provide client accounting services because it’s cost-effective, but also because it doesn’t take a consultant to set up, and there are plenty of training options available.

Experience: One of QBO’s biggest selling points, Swick said, is how many apps integrate with the software. “It’s very flexible,” Swick said, “and will grow as the client grows.”

Being cloud-based, QBO also allows Swick that coveted flexibility of enabling staff members to work from anywhere. It keeps overhead low, as MissionFirst Accounting doesn’t need as much office space. Because of the remote capabilities, she also has a bigger talent pool to draw from when hiring.

Additionally, Swick said, “The automation they built into QBO is so important for us. It saves us so much time and reduces the need for data entry.”

However, Swick has also found that, especially for the nonprofit sector she serves, QBO’s reporting capabilities aren’t flexible enough. “Nonprofits have to report on net assets and fund balances, which you have to track manually outside of QuickBooks,” she said. “If it’s a simple organization, that’s fine; but if it’s complex, you spend a lot more time in QuickBooks than you’d like trying to figure out the reports.”

Firm growth: To be an outsourced CFO as opposed to in-house, the challenge is “being able to be in the conversation at the appropriate time,” Swick said. “We hear what the organization tells us. What we’re not there to hear are the conversations in the hallway or at the water cooler.”

“We make it a point to be available to clients,” she continued. “We check in with them on a regular basis so we’re not saying ‘Hi’ just once a month.”

Because QBO reduces time spent on data entry, Swick and her staff are able to spend more time having better conversations with clients. “The client wants to talk for five minutes about ‘Where are we now?’ but the rest of the time, they want to talk about projecting and strategizing for the future,” Swick said. Now, the firm performs month-end closes quickly, and spends more time on analysis.

“We’re still young, and we’re still establishing infrastructure, but as we look to the future, we want to be available for as many nonprofits as we can, and be affordable but also strategic,” Swick said.

VALUABLE PERSPECTIVE

Product: Xero

Firm: The Digital CPA

Staff users: 5

Start date: 2012

On record: Founder and chief accounting officer Jay Kimelman, CPA

Objective: Jay Kimelman started using Xero in 2012, and he built his firm around the software. That year, he was looking for a cloud-based general ledger. There weren’t too many options for a small firm, and Xero won him over because of its broad cloud functionality.

Experience: “The No. 1 feature of Xero is cash coding,” Kimelman said. “I’ve noticed a lot of my clients are very habitual. Cash coding allows us to group things together, like by payee, and process them very quickly.”

Kimelman described how he was once able to perform a clean-up on 11,000 transactions within a couple of hours with the help of the cash coding feature.

Xero also connects to a variety of different apps. “Xero doesn’t have to be the greatest at everything — it just has to be the greatest GL software, which is the center of the world, and then we find the best apps for them, and that is its power,” Kimelman said.

Payroll, however, has offered a bit of a challenge to the firm. “The feature has been slow coming out, and as a result, we use an add-on service like Gusto, bring it in through API, and that helps us right there,” Kimelman said.

Previously, reporting in Xero was “very static.” Kimelman would have to move back and forth between Xero and Microsoft Excel to create the reports he needed. Now, the software has improved, offering a layout editor that allows users to create flexible reports.

Firm growth: Kimelman served as the CFO of South Carolina drug manufacturer Nephron Pharmaceuticals between 2000 and 2003, and founded his own nutraceuticals company, Total Nutrition Technology, in 2003.

The difference between in-house and outsourced accounting services, Kimelman said, is basically depth versus breadth. He has a wealth of experience in the food and drug industry, but now, he services clients in all kinds of industries, and can take what he learns from each of those and apply it to other clients.

Kimelman describes this as “perspective,” and it’s part of the value proposition he offers his clients. Xero’s part to play is that it frees up his time, so he can bring that value meaningfully, not just in a cursory fashion, to more clients.

“We’re in the process of scaling in 2018,” Kimelman added. “We’ve got some major growth plans. We’re looking at workflow products, and we’re getting back to looking at the Xero platform. The introduction of Xero HQ as our main source of dashboard data, in addition to Xero Practice Manager, is going to give us that one platform to work off of.”

Eventually, Kimelman’s plan is to use that efficiency to fully replace himself in the day-to-day operations so he can focus completely on running the firm.

Objective: Bryan Rhody joined Top 100 Firm BPM in 2016, and becoming a business process outsourcing partner with NetSuite was one of his first initiatives. BPM had been providing CAS for years (the firm was founded in 1986). “It’s one of our core service offerings, and one that our firm feels is very strategic for us as we continue to grow,” Rhody said. “We wanted a software that could work for a company at any stage.”

NetSuite allows BPM to offer accounting services that fit any size business, be it a recent startup or a company that’s planning an exit strategy. “NetSuite BPM has the ability to create what is called ‘bundles,’ or what I like to call ‘business in a box,’” Rhody said. “It gives BPM the opportunity to build pre-packaged, industry-specific solutions that are focused on what we have learned to be best practices. This offers BPM the ability to deploy our services more efficiently.”

“Using NetSuite as the core of our outsourced accounting services, we’re better able to streamline our own services, which makes us more efficient for our clients,” Rhody added.

Experience: “The core offering of outsourced accounting services is finance and accounting, but we like the fact that NetSuite has significant functionality beyond just that, like inventory and e-commerce,” Rhody said. “We work with a lot of clients for whom that may not be a need right now, but they’re planning to go there.”

NetSuite’s automated workflow is also a highlight for BPM. “Whether it’s approvals or routings, having that built in is a big advantage,” Rhody said.

NetSuite offers BPM’s clients a solution they can “tailor to scale,” Rhody added. “Our clients get to focus on their core business and their next big thing, while we focus on the accounting and advisory aspect — and the system takes care of itself.”

The software offers standardization, Rhody said. “It’s about creating efficiencies in the back office — that’s what clients are looking for when they outsource services. We’re better able to standardize and streamline our own internal processes.”

While NetSuite offers a lot of support both to BPM and the firm’s clients (Rhody called the company’s onboarding and enablement programming “tremendous”), Rhody also said that change is always hard. Internal education and training has been a challenge, but, “at end of day, this is all about providing best-in-class accounting services. Our team wants to be able to take it and run, but learning a new software is a challenge. Creating a comprehensive training plan with the help of NetSuite to get our folks up to speed has been a tremendous help.”

Firm growth: Terry Hill joined BPM in October, tasked with leading the firm’s CFO and controller service line supporting middle-market companies.

“With the addition of Terry, our goal is to go up-market,” Rhody explained. “The clients we’re targeting will require more sophisticated capabilities — companies mostly in technology, financial services, fintech, life sciences and biotech.” He also sees the venture capital and private equity space as a compelling area of growth. “These partners make decisions with extreme speed and efficiency. We see NetSuite as a partner in that because of its efficiency and flexibility.”

“We want to provide immediate value, but have a holistic focus on a business’ entire set of needs all the way up to CEO,” Hill added.

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